This First Amendment to Credit Agreement (the “
Amendment ”), dated as of March 20, 2008 (the “
Effective Date ”), is by and among Associated Estates
Realty Corporation (the “ Borrower ”), National
City Bank and the other banks and financial institutions whose
signatures appear below (collectively, the “ Lenders
”) and National City Bank, not individually but as
administrative agent for the Lenders (the “ Administrative
Agent ”).

RECITALS

A.
Borrower, Administrative Agent, and certain of the Lenders are
parties to that certain Credit Agreement dated as of April 24, 2007
(the “ Credit Agreement ”), pursuant to which
such Lenders made available to Borrower an unsecured revolving
credit facility with an Aggregate Commitment of $100,000,000.
All capitalized terms used in this Amendment and not otherwise
defined herein shall have the meanings given to such terms in the
Credit Agreement.

B.
Borrower and the Lenders wish to amend the Credit Agreement to
increase the Aggregate Commitment to $150,000,000 by adding new
Lenders and increasing the Commitments of certain of the existing
Lenders, to extend the Facility Termination Date thereunder and to
modify certain other terms, covenants, and provisions in the Credit
Agreement, all as set forth herein.

NOW, THEREFORE, in consideration of the foregoing recitals and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as
follows:

AGREEMENTS

1.
Incorporation . The foregoing Recitals to this Amendment are
hereby incorporated and made part of this Amendment.

2.
Effectiveness . This Amendment shall be effective from and
after the Effective Date shown above, which is the date on which
each of the parties hereto has executed and delivered to the
Administrative Agent a counterpart of this Amendment.

3.
New and Increased Commitments . From and after the Effective
Date (i) US Bank, National Association shall be considered a
“Lender” under the Credit Agreement and the Loan
Documents and each shall have a Commitment in the amount shown next
to its signature on the signature pages of this Amendment, and
(ii) National City Bank, Wells Fargo Bank, N.A., Raymond James
Bank, FSB, and The Huntington National Bank shall each be deemed to
have increased its Commitment to the increased amount shown next to
its signature on the signature pages of this Amendment. For
purposes of Section 14.1 of the Credit Agreement (Notices), the
address(es) and facsimile number(s) for each such new Lender shall
be as specified below its signature on the signature pages of this
Amendment. The Borrower shall, on or before the Effective Date,
execute and deliver to the Administrative Agent on behalf of each
such new Lender a Note to evidence the Loans to be made by such
Lender.

4.
Changes to Defined Terms . From and after the
Effective Date, the following definitions in Article I of the
Credit Agreement are amended as follows:

a.
The definition of “Aggregate Commitment” is
deleted in its entirety and shall be replaced by the following:

“Aggregate Commitment” means, as of any date, the
aggregate of the then-current Commitments of all the Lenders, which
is, as of the Effective Date of the First Amendment to this
Agreement, $150,000,000.

b.
The definition of “Capitalization Rate” shall be
amended by modifying clause (i) thereof to read “seven and
one quarter percent (7.25%).”

c.
The definition of “Facility Termination Date” is
deleted in its entirety and shall be replaced by the following:

“Facility Termination Date” shall mean March 20, 2011,
which shall be the third (3rd ) anniversary of the Effective Date
of the First Amendment to this Agreement, or if such day is not a
Business Day the last Business Day immediately preceding such
day.

d.
The definition of “Total Asset Value” is deleted in its
entirety and shall be replaced with the following:

“Total Asset Value” means, as of any date, (i) the Net
Operating Income for the most recent four (4) consecutive fiscal
quarters of the Borrower for which financial results have been
reported attributable to Projects then owned or leased by Borrower
or any other member of the Consolidated Group (excluding 100% of
the Net Operating Income attributable to any such Projects which
have not been owned or leased by any combination of Borrower, other
members of the Consolidated Group or Investment Affiliates for at
least eight (8) full fiscal quarters as of the end of the most
recent fiscal quarter for which financial results have been
reported, other than Net Operating Income from Overlimit Projects
(as defined below) then owned or leased by Borrower or any other
member of the Consolidated Group which Net Operating Income will be
included in this clause (i)) divided by the Capitalization Rate,
plus (ii) 100% of cost for any such Projects first acquired or
leased during such eight (8) fiscal quarter period (including the
amount of any assumed Indebtedness secured thereby) which are not
Overlimit Projects, plus (iii) the Consolidated Group Pro Rata
Share of Net Operating Income for the most recent four (4)
consecutive fiscal quarters of the Borrower for which financial
results have been reported attributable to Projects then owned or
leased by an Investment Affiliate (excluding Net Operating Income
attributable to any such Projects which have not been so owned or
leased for eight (8) fiscal quarters as of the end of such most
recent fiscal quarter for which financial results have been
reported, other than Net Operating Income from Overlimit Projects
(as defined below) then owned or leased by an Investment Affiliate
which Net Operating Income will be included in this clause (iii))
divided by the Capitalization Rate, plus (iv) the Consolidated
Group Pro Rata Share of 100% of cost for any such Projects first
acquired or leased by an Investment Affiliate during such eight (8)
fiscal quarter period (including the amount of any assumed
Indebtedness secured thereby); plus (v) cash and Cash Equivalents
owned by Borrower or any other member of the Consolidated Group as
of the end of the most recent fiscal quarter for which financial
results have been reported, plus (vi) the Consolidated Group Pro
Rata Share of all cash and Cash Equivalents owned by Investment
Affiliates as of the end of the most recent fiscal quarter
financial results have been reported plus (vii) Real Property Under
Development and Undeveloped Land of the Consolidated Group, valued
at cost, plus (viii) the Consolidated Group Pro Rata Share of any
Real Property Under Development and Undeveloped Land of Investment
Affiliates, valued at cost, plus (ix) First Mortgage Receivables
owned by the Consolidated Group, valued in accordance with GAAP,
plus (x) the Consolidated Group Pro Rata Share of First Mortgage
Receivables owned by any Investment Affiliates, valued in
accordance with GAAP. As used herein, the term
“Overlimit Projects” shall mean, if at any time the
aggregate amount contributed to Total Asset Value under clauses
(ii) and (iv) of this definition on account of acquired Projects
owned or leased for more than four (4) quarters but less than nine
(9) quarters would exceed twenty percent (20%) of Total Asset
Value, a sufficient number of such Project(s) which would otherwise
be valued at cost under such clauses (ii) or (iv), which the
Company shall designate to instead be valued in accordance with
clauses (i) or (iii), so that the aggregate value of the remaining
Projects owned or leased for more than four (4) quarters but less
than nine (9) quarters which are included at cost under clauses
(ii) and (iv) of this definition do not exceed twenty percent (20%)
of Total Asset Value.

e.
The definition of “Unencumbered Real Property
Value” is deleted in its entirety and shall be replaced by
the following:

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